The Federal Trade Commission defines native advertising as paid commercial "content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online."

That similarity is what gives native advertising its additional value to advertisers and to publishers; its form and placement enable native advertising to generate revenue far greater than banner ads and other more traditional forms of online ads. That similarity, however, also raises serious ethical concerns if and when advertising becomes difficult to distinguish from journalism.

A basic truth-in-advertising principle is that it’s deceptive to mislead consumers about the commercial nature of content. Advertisements or promotional messages are deceptive if they convey to consumers expressly or by implication that they’re independent, impartial, or from a source other than the sponsoring advertiser – in other words, that they’re something other than ads.

The RTDNA Code of Ethics advises transparency as a guard against misleading audiences, intentionally or unintentionally: "Transparency provides the public with the means to assess credibility and to determine who deserves trust," it says. Media organizations that benefit from revenue raised by native advertising have a heightened obligation to ensure that their readers, viewers and/or listeners know the nature of the content they consume.

To be clear, content has been sponsored for decades. Advertisers have associated themselves various broadcast "franchises," for example, by running on-air commercials and "billboards" adjacent to coverage. Some broadcasters even allow advertisers to buy space for their logo within content, such as on weather graphics. This association, however, has not traditionally entailed any actual control over content. Native advertising is different. The content is not only supported by sales revenue; the content is actually created and provided by the advertiser.

At its most fundamental level, journalism puts the best interests of the public ahead of all other interests. At that same fundamental level, advertising puts the interests of those who pay for it ahead of all other interests. This does not mean there can be no overlap. Sometimes content created and provided by advertisers can provide meaningful benefits to audiences. Still, those who consume such content should know it was not selected or produced on the same basis as the journalism that surrounds it; they should understand that it exists because a commercial entity paid for its publication.

At a minimum, news organizations should explicitly label native advertising as such. They should avoid ambiguous terms such as "Brand Voices," "Promoted Stories" or "Chosen for You." As the FTC points out, "consumers reasonably may interpret other terms, such as ‘Presented by [X],’ ‘Brought to You by [X],’ ‘Promoted by [X],’ or ‘Sponsored by [X]’ to mean that a sponsoring advertiser funded or ‘underwrote’ but did not create or influence the content."

The RTDNA Codes of Ethics takes that a step further: "Acknowledging sponsor-provided content ... is essential, but transparency alone is not adequate. It does not entitle journalists to lower their standards of fairness or truth." That suggests news organizations that carry native advertising should never substitute such content for real reporting, but should ensure that the surrounding journalism — the material that gives native advertising its value in the first place — remains independent, accurate and uncompromising.